If the concern is how much the policy costs the nation, then I don't think that's a sufficient reason to change things either. The top 1% in America hold about 31% of a total $140 trillion, or $43 trillion. This is, in a very optimistic case, around twenty years worth of the current federal deficit. Given the trajectory it's taken over my entire lifetime I find it unlikely it would last more than a decade. If the concern is cost, we have a "money out" problem in the US, not a "money in" one, largely driven by our ballooning mandatory spending (much of which goes to a radically outsized group of old people, whose entitlements neither party will touch despite their outsized ownership of wealth) and the high interest expense that's caused. Even if we outright confiscated every dollar of the 1%'s net worth, that wouldn't represent a remotely sustainable solution. Hence my comment about most of these policies looking more like schadenfreude than a sincere desire to fix things.
In the "family farm" (and "family business") scenario, we're talking about private companies -- whether incorporated or not, all the owners are related. If part of such a company needs to be sold off to pay taxes, it would presumably be sold to a someone at arm's length, which would fundamentally change the business structure -- just like running a startup with VC investors is different from running a bootstrapped startup.
There's not many plausible routes to "paying the millions-dollar death tax so that developers don't turn the cornfield into a suburb" in such scenarios. Mostly moot though, this all played out and was over before most of us were born. I suppose there are gigantic 20,000 operations that "won't stay in the family"... but those farmers:
1. Aren't really living on the same piece of land that they farm
2. Having to sell off 1500 acres to pay the tax bill doesn't much affect their operation except that it's slightly smaller
3. Have someone custom combine it anyway... they're basically a management company that hires a bunch of contractors
4. Generally are incorporated in such a way that sole ownership hasn't been an issue since great-great-granpa died back in 1961
Family farms are, at this point, largely mythological.
1. Continue operations of the family farm, assuming you can come up with the money to cover taxes.
2. Sell the farm to Big Farm, Inc., get a $5M check and forget about it, regardless of the consequences that means to your customers.
Inheritance, even with normal tax, is a cheap way of keeping money in the family and keeping rich people rich. It is not based on merit, capabilities or need and serves no purpose in a society based on improving the lives of the entire population. (Which you can argue is not what [country with low inheritance tax] is)
I would say that society is served well by the ability of widows to inherit and not be left destitute. Similarly for minor children.
If you're talking specifically about inheritance by adult children, I agree the arguments in favour are weaker.
If you have $300 to your name, you're not getting finance. The bank will just laugh you out the door.
Billionaires may not be a uniquely Canadian problem, but the lack of a wealthy middle of entrepreneurs and reasonably wealthy individuals is uniquely Canadian.
Canadians cheer at taxing the rich and as a result end up with a “middle-class” that is barely getting by, a billionaire class that rules the Kingdom, and nothing in between.
Canada is designed to support Oligopolies. It does so in the media, food distribution, telecom, insurance, banking and virtually every industry in the country. This is an intentional policy decision of punishing entrepreneurs and pushing us out of the country. Look at the recent wealth taxes and the national response to them as an example.
- The first year it has 10k€ ARR.
- So it is worth 100k€. You must my pay 30k€ in capital gains taxes.
Like this, every year? Every time it has more revenue, it multiplies its future worth, therefore multiplies it FMV, therefore you must pay the CG on the multiple of your income?
In Canada, assets are deemed to have been disposed of upon death (or gifting) so the estate pays capital gains taxes on the accrued profit. There are a few exemptions for political reasons, e.g. to allow farmers to pass appreciated farm property to their children tax free, but they're sufficiently limited that they don't cost very much.
Seems like an obvious fix to me -- when the cost basis is stepped up, taxes are due -- and in practice it seems to work pretty well.